Customers struggling to pay their energy bills this winter will receive extra support from their supplier, Ofgem has announced.
New rules outlined by the energy regulator will require suppliers to offer emergency credit to prepayment customers struggling to top up their meters from December 15. Any other customers having difficulty paying bills must also be offered ‘realistic and sustainable’ debt repayment plans.
The new regulations are intended to prevent vulnerable customers, many of whom are on prepayment tariffs, from being cut off from their energy supplier this winter. As well as those affected financially from the pandemic, people needing to self-isolate or with mobility issues may also struggle to get to a shop to top up their meter.
According to previous from Ofgem, around one in seven of the 4.3 million prepayment customers in the UK had been disconnected from their energy supply over the past year.
At the beginning of the Covid-19 pandemic back in March, energy suppliers made a voluntary agreement with the government to protect any customers affected by the crisis. However, Ofgem’s new licence rules mean suppliers are now formally required to offer the help.
This latest announcement comes after Ofgem cut the energy price cap on October 1 due to cheaper wholesale gas prices. The default tariff price cap has been cut to £1,402, the lowest its been since the price cap’s introduction last year, while the prepayment meter cap has dropped to £1,070. This will result in cheaper energy bills for millions of customers.
“Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations,” said Philippa Pickford, director of retail at Ofgem.
“Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter.
“Alongside our wider programme of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.”
According to recent research from the charity Citizens Advice, around 6 million people in the UK are believed to have fallen behind on at least one household bill during the pandemic. This includes around 2.8 million who have fallen into debt with their energy supplier.
Dame Gillian Guy, chief executive of Citizens Advice, said: “This raft of new protections from Ofgem should help more people who are struggling to stay afloat. Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health - especially during a global pandemic.
“We’ve been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we’re very pleased to see this announcement from the regulator.
“Even with this short term support from suppliers, many people will still struggle to pay for the basics. The government needs to do more to support those who need it most, including making the temporary uplift to Universal Credit and Working Tax Credit permanent.”
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